Further to our related posts in March and April of this year, we write with our third (and perhaps final…) update on the Asda/Sainsbury’s merger.

Following the rejection of the merger by the UK Competition and Markets Authority (CMA) in April, in what appears to be the final blow for both parties following their attempts to get this merger over the line, the CMA has now imposed a 10 year ban on the two companies joining forces. This ban prevents both companies from obtaining a controlling interest in the other, or from any entity holding an interest in the other, without the CMA’s prior written consent.

The merger was rejected by the CMA on the basis that such a union, which would have seen the household names own a combined slice of the grocery market worth approximately 31% (according to some analysts), would lessen competition on a regional and national level thereby increasing prices and reducing the quality and choice of goods available to consumers.

Under the Enterprise Act 2002, the CMA has the broad power to “remedy, mitigate or prevent the substantial lessening of competition”, by taking any reasonable and practicable action it deems necessary. Although this power is not limited to a certain duration, remedies must have “appropriate duration and timing” according to the CMA’s guidance. In this case, the CMA deemed a 10 year ban to be reasonable in order to protect consumers and the market from the proposed merger.

So what can the supermarket giants do now, if anything? Either company may request a review of the CMA’s 10 year ban at the Competition Appeal Tribunal. However, it appears from the length of the ban and the approach adopted by the CMA, that this decision is unlikely to be reversed any time soon.